Payroll, Benefits, and HR Management Innovator Gusto Secures Series E Round Extension

Payroll, Benefits, and HR Management Innovator Gusto Secures Series E Round Extension
  • TechCrunch and Pitchbook are reporting that HR innovator Gusto has raised an extension on its Series E round.
  • The company’s Series E round, launched in 2021, was led by T. Rowe Price Associates, and totaled $175 million.
  • The amount of the extension was not disclosed, but it is believed to be in the neighborhood of $55 million.

TechCrunch is reporting that HR technology company – and Finovate alum – Gusto has secured an extension of its 2021 Series E funding round. That round featured an investment of $175 million and was led by T. Rowe Price Associates. The amount of capital in the extension announced this week has not been disclosed, but TechCrunch suggests that the sum “appears to be around the $55 million mark.” Ahead of this week’s extension announcement, Gusto had a valuation of nearly $10 billion, and now has more than $746 in total funding.

Gusto offers an all-in-one platform to enable businesses to successfully automate and manage their HR operations. This includes a full-service payroll capability, as well as employee benefits management, hiring and onboarding, talent management, and timecards and attendance. The platform also provides insights and reporting that support anonymous team surveys, customizable reports, automatic compliance alerts, and more.

The company, launched in 2012, made its Finovate debut as ZenPayroll in 2014. Rebranding one year later as Gusto, the company has since grown into a fintech unicorn with more than 200,000 business customers nationwide. Gusto processes tens of billions of dollars in payroll every year while providing employee benefits – including health insurance and 401(k) accounts – that help companies provide an optimal environment for their workers.

Gusto began the year with an announcement that Whiz Consulting, based in Dallas Texas, launched its Gusto Payroll Services offering. Also in January, Gusto announced the appointment of former GitHub and Tesla executive Mike Taylor as its new Chief Financial Officer. This spring, Gusto reported that performance management software provider Engagedly would offer a seamless integration with its platform.

“We are excited to partner with Gusto, a leader in the people management platform,” Engagedly President and co-founder Sri Chellappa said. “As a partner, Gusto will help our joint clients leverage the vast power of Engagedly for employee engagement, people development, learning and performance management, and providing a seamless and holistic employee experience.”

Gusto is headquartered in San Francisco, California. Co-founder Joshua Reeves is CEO.


Photo by Henry & Co.

Human Resources Management Innovator Gusto Teams Up with Xendoo

Human Resources Management Innovator Gusto Teams Up with Xendoo

Cloud-based payroll benefits and human resource management innovator Gusto announced a partnership with online accounting and bookkeeping firm Xendoo to help launch Xendoo Payroll. Gusto Head of Partnerships Somrat Nyogi described the partnership as part of an overall trend toward digitization of key business operations. “Through our partnership, Xendoo is combining payroll and bookkeeping services to deliver financial peace of mind to small business owners,” Nyogi said.

Not only is this week’s partnership announcement part of a relationship between the two companies that goes back “for years,” but the collaboration, according to Xendoo CEO and founder Lil Roberts, also anticipates the beginning of a “long-term deeper tech partnership” between the two firms.

“Partnering with Gusto was a natural decision as we both strive for the same outcome: taking the stress out of finances for small business owners so they can focus on what matters most – growing their businesses,” Roberts explained. “Integrating Gusto’s embedded payroll into our new Xendoo Payroll solution will allow us to better serve our customers and expand our offering to create an all-in-one-place solution for the SMB community.” 

Available via API, Gusto Embedded Payroll enables developers to embed and customize payroll functionality into their platforms. In addition to Xendoo’s launch, Gusto reported that “more than a dozen” companies already have begun to deploy the new payroll solution. Moreover, these firms will be able to leverage their new payroll functionality to gain deeper insights into their customers and discover opportunities to provide additional services. Among those first out-of-the-gate with Gusto Embedded Payroll is SMB banking platform Novo, which will become one of the first platforms of its kind to offer integrated payroll services.

“Payroll is one of the biggest expenses for small businesses, and being able to integrate it more deeply into the whole financial picture opens up many opportunities to optimize cash flow and operations,” Novo VP of Product Matt Hamilton said. “We’re excited about working with Gusto to provide the most flexible payroll experience to our businesses.”

Making its Finovate debut as ZenPayroll in 2014, Gusto was founded in 2011 and is headquartered in San Francisco, California. From its origins as a payroll services startup, Gusto has grown into a small business human resources management platform that helps companies with employee onboarding, benefits, insurance, and other HR operations. Plans start as low as $45/month and more than 100,000 businesses are on the Gusto platform.

Gusto has raised more than $516 million in funding, and includes Fidelity Management and Research Company, and Generation Investment Management among its most recent investors. Earlier this month, the company announced its first acquisition, a startup called Ardius that automates tax compliance for companies with R&D tax credits. Joshua Reeves is Gusto CEO.


Photo by Enric Cruz López from Pexels

Gusto Launches Challenger Banking Service

Gusto Launches Challenger Banking Service

Is there room for another challenger bank aimed at serving the underbanked? Payroll, benefits, and HR solutions firm Gusto thinks so.

The San Francisco-based company announced the launch of Gusto Wallet today. Exclusive to employees of the 100,000+ businesses that use Gusto’s payroll services, the mobile wallet offers direct deposit, banking tools, savings accounts, and access to emergency funds.

Among the benefits of Gusto’s new account are savings goals, a debit card with free ATM withdrawals, and a unique feature called Gusto Cashout. The new tool allows employees to access money in between paydays. The amount borrowed comes with no fees and no interest, and is repaid automatically from the employee’s next paycheck.

The accounts are aimed to promote financial wellness. In addition to the Gusto Cashout feature, Gusto pays a higher-than-average return on savings goals. Users can earn 0.34% APY on up to five goals. And in order to help encourage accountholders to save, Gusto Wallet offers users the ability to automatically route a portion of their paycheck into their savings accounts.

Like most U.S.-based challenger banks, Gusto is partnering with an incumbent to power its accounts. The company has teamed up with Kansas City, Missouri-based nbkc bank to back its accounts. Other fintechs that use nbkc bank to offer challenger banking services include Betterment, Joust, and Truebill.

Unlike most challenger banks, however, Gusto Wallet has direct deposits built into its design. Most banks fight hard to get their users to directly deposit their paycheck into their account by using expensive promotions and incentives. My personal bank once offered me $300 to sign up for direct deposit. Gusto, however, doesn’t need to do this, since payroll deposit is built into its mobile wallet and it is limited to users whose employers pay them via Gusto’s payroll service.

Along with the Gusto Wallet launch, the company also announced today it is helping small businesses set up health reimbursement accounts via a program called QSHERA.

While Gusto’s Cashout feature may be appealing to the lower income, underbanked population, the company may need to add another feature or two to compete with popular challenger banks such as Chime and Dave. For example, Chime offers fee-free overdrafts, and pays 1% APY on savings goals and Dave helps users build their credit score via a partnership with LevelCredit.


Photo by Lesly Juarez on Unsplash

10 Fintechs that Make Taxes Less Taxing

10 Fintechs that Make Taxes Less Taxing

Taxes, especially in the U.S., can be anxiety-inducing not only for consumers but also for small businesses. And even though this year’s tax filing deadline has been extended to July 15, the filing and payment requirements remain unchanged.

“The daunting task of gathering documents for a year that has passed is one that is difficult for small business owners, especially when they already feel overwhelmed at tax time,” said Lil Roberts, CEO and founder of Xendoo. “Coupling that pain point with small businesses feeling that federal tax is a “black box” and understanding how to maximize tax savings is also extremely frustrating.”

Fortunately, where there is a financial problem there is a fintech solution. There are many fintechs available to help both individuals and businesses not only understand their taxes but also to facilitate tax payment. Below, we’ve highlighted the top 10 tax-focused fintechs.

ANNA

ANNA offers a business bank account and mobile tax app that help merchants with their invoicing, expense tracking, and taxes. The company’s app reminds businesses about tax deadlines and helps them prepare by estimating how much they owe as they earn revenue. ANNA also has a team of accountants to help prepare and submit tax returns.

Avalara

Avalara offers tax compliance tools for a range of businesses. The Seattle-based company, which counts customers such as Pinterest, Adidas, and Bed Bath & Beyond, offers products to help companies calculate sales tax, gather data to prepare and file tax returns, as well as collect, store, and manage tax documents on behalf of the business. Avalara offers products tailored to specific businesses, including ecommerce, lodging, communications, and restaurants.

Credit Karma

In 2016, financial health company Credit Karma launched a free tax filing service. Interestingly, the company was recently purchased by TurboTax parent Intuit for $7 billion. In comparison with Credit Karma’s free service, TurboTax charges users anywhere from $60 to $120 for a federal return and $45 for a state return.

DAVO

DAVO launched in 2011 to be the ADP for merchants’ sales tax. In other words, DAVO automates the entire sales tax process on a business’ behalf. The company connects to the merchant’s point-of-sale technology to collect sales data and sets aside taxes on a daily basis. When sales tax is due, DAVO files and pays on the small business’ behalf.

Gusto

HR and payroll company Gusto has a robust set of services to make small business owners’ lives easier. The company automatically files payroll taxes and distributes I-9s, 1099s, and W-2s to employees. Gusto also helps businesses stay compliant by staying up-to-date on changing tax laws and doing all tax-related calculations on the business’ behalf.

Refundo

Refundo offers a suite of solutions to help tax preparers bring their operations into the digital age. Among the company’s products are mobile document transfers, audit assistance, tax preparation fee collection service, payment acceptance tools, and refund advance technology. At the end of the day, the company’s solutions not only make the tax preparer’s life easier, they make the lives of their taxpaying clients easier, as well.

RoamHR

With a mission to make self-employment easier, RoamHR automatically removes tax withholdings from users’ accounts once they get paid and places the funds into a RoamHR Tax Withholding Account. The company also offers tools that help users track deductible expenses, such as mileage, and helps them file their business taxes each quarter.

Taxnology

Taxnology has built a digital tax compliance center, a web-based solution to help businesses manage their taxes digitally. The company stores business’ historical tax data in the cloud so that it can be used for future cash flow planning and budget purposes or retrieved in the event of an audit. Taxnology is currently only available in Hungary.

Xendoo

Xendoo offers bookkeeping and CPA services that connect with businesses’ financial accounts to deliver monthly reports, business insights, and tax filing. Because Xendoo has a comprehensive view of the merchant’s financials, the company is able to provide tax consulting services, as well.

Xero

Cloud accounting software company Xero has been helping small businesses with their bookkeeping since it was founded in 2006. The company also offers solutions to help tax preparers who have Xero clients automate and customize tax-related tasks. For businesses who prepare taxes on their own, Xero offers tools to file taxes online, as well as prepare sales tax returns using software that leverages a company’s sales data to automatically calculate the taxes.


Roberts added one final thought for those businesses working toward that July 15 deadline. “For a smooth process, best practice is to have monthly bookkeeping done so tax benefits are being collected all year, and having books in order to make tax time more peaceful.” And during a pandemic, anything that can make a process more peaceful is worth doing.

Gusto Raises $200 Million with $3.8 Billion Valuation

Gusto Raises $200 Million with $3.8 Billion Valuation

Payroll, benefits, and HR platform Gusto just landed $200 million in funding, a slew of new investors, and a valuation of $3.8 billion. The Series D round almost doubles the $2 billion valuation the San Francisco-based company received in December of last year after closing $140 million in funding. Gusto’s total funding now sits at $510 million.

The new investors, Fidelity and Generation Investment Management, were joined by existing investors T. Rowe Price Associates, Dragoneer, General Catalyst, CapitalG, 137 Ventures, Y Combinator Continuity, and Emergence Capital. Gusto CEO Joshua Reeves said that Gusto selected the group “based on their long-term perspective.” He added, “These investors are committed to our view of creating a durable and sustainable business, and their investments will fuel our ongoing creation of equitable solutions and inclusive economic growth for everyone.”

Gusto will use the funding to further its research and development efforts, specifically in the fintech and healthcare arenas. The company also plans to grow its workforce, which currently sits at more than 1,000 employees spread across Denver, San Francisco, and New York.

Along with the funding, Gusto has onboarded its first independent board member, Anne Raimondi (pictured), former SVP of operations at Zendesk.

Gusto has added two notable features to its platform recently, including Time Tracking, which syncs hourly employees’ time directly to the company’s payroll in order to properly calculate time off and holidays; and Flexible Pay, which allows employees to select when they prefer to receive their paycheck. This year, the company formed partnerships with ScaleFactor and Trainual to deliver accounting and offer new hire training, respectively.

As for what’s next, it’s hard not to wonder about an IPO. We interviewed Reeves for a blog post titled M&A is the New IPO last month. When asked about the company’s plans, Reeves said, “There are pros and cons to being a public company, and we believe that today, the benefits of Gusto staying private outweigh the benefits of being public.” He added, “An IPO isn’t our end-goal; instead, it’s creating a world where work empowers a better life. We currently serve more than 1% of all employers in the U.S., which is an accomplishment we’re incredibly proud of, but we realize we still have a lot more work to do. Building Gusto to its full potential is a multi-decade mission for me.”

Gusto launched in 2012 under the name ZenPayroll. At FinovateSpring 2014, Reeves showcased the company’s flagship payroll solution while smiling throughout the entire seven minute demo.

Finovate Alumni News

On Finovate.com

  • Content Capture Innovator Ephesoft Allies with Grant Thornton.
  • Gusto Raises $200 Million with $3.8 Billion Valuation.

Around the web

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

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Around the web

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

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  • Onfido welcomes Kevin Goldsmith as Chief Technology Officer and Thomas Ammirati as Chief Revenue Officer .

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Gusto Teams with Trainual to Automate Job Role Training

Gusto Teams with Trainual to Automate Job Role Training

Payroll, benefits, and HR platform Gusto is improving its offerings by teaming up with Trainual, a cloud-based training manual software company.

The collaboration will help Gusto’s business clients automate the process of onboarding new employees by giving them resources to train them in their new role. Igor Khayet, head of business development at Gusto, referred to training and onboarding as “pain points for small businesses.” He added, “[O]ur partnership with Trainual provides an easy and efficient way to serve a business’ team so they can do their best work.”

When a Gusto client adds a new employee, the new hire will automatically be added to Trainual and receive the training they need for their job. The integration with Trainual will allow Gusto’s small business clients to document processes and policies,
customize operations manuals, assign training and test sessions, and monitor completion rates.

“We’re particularly excited about this partnership because it streamlines one of the most commonly missed, but critical steps when a new hire is brought into an organization: equipping them with the right training from the start,” said Trainual founder and CEO Chris Ronzio. “Business owners can now easily connect critical aspects of their business, bringing a new level of operational efficiency to the onboarding process so they can continue to focus on what matters most –– growth.”

With offices in San Francisco and Denver, Gusto processes tens of billions of dollars in payroll for more than 60,000 businesses in the U.S. The company also offers an easier way for small businesses to offer their employees benefits such as health insurance, 401(k) retirement plans, and 529 college savings plans.

Gusto launched in 2012 under the name ZenPayroll and showcased its flagship payroll solution at FinovateSpring 2014. Last year, the company unveiled Flexible Pay, a solution that allows employees to get paid on a different schedule than their employer’s payroll schedule. The company has raised $316 million. Joshua Reeves is CEO.

Finovate Alumni News

On Finovate.com

  • Gusto Teams with Trainual to Automate Job Role Training.
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  • Trustly grows to 300 employees.
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  • Ripple, IBM, SWIFT and nearly 100 other organizations launch the International Association of Trusted Blockchain Applications (INATBA).
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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

On Finovate.com

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  • Gusto names Kenny Wyatt as Chief Sales Officer.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.